Tag: stock market

Medical technology company Becton Dickinson and Co. said Friday it has received a warning letter from the U.S. Food and Drug Administration relating to its preanalytical systems business unit. The company said it will provide a full response to the regulator by its Feb. 1 deadline. “We take any potential issue with our products very seriously and are cooperating fully with FDA on this matter,” Richard Byrd, worldwide president of the preanalytics business said in a statement. “After the FDA inspection in July, we took prompt action that we believed fully addressed the agency’s inspectional observations.” The FDA said its letter cited several violations of federal law, including the marketing of modified versions of BD Vacutainer blood collection tubes without securing FDA approval and failing to submit medical device reports to the FDA within a required timeframe. “Our inspection showed that BD violated the law by making a significant change to certain devices the company manufactures without notifying the FDA and failing to follow good manufacturing practice requirements,” said Donald St. Pierre, acting director of the Office of In Vitro Diagnostics and Radiological Health and deputy director of new product evaluation at the FDA’s Center for Devices and Radiological Health. “We are continuing to aggressively investigate this issue, including whether the use of BD tubes led to inaccurate lead test results.” Shares were slightly lower Friday, but have gained 30% in the last 12 months, while the S&P 500 has gained 22%.

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The Dow Jones Industrial Average and S&P 500 index opened higher on Friday, extending their run into the record books, as fourth-quarter corporate earnings season kicked off. The Dow rose 90 points, or 0.4%, at 25,670, the S&P 500 index climbed 0.2% at 2,771. However, the Nasdaq Composite Index was under pressure, trading flat at 7,213, as Facebook Inc.’s shares fell 4.5% after late Thursday announcing changes to the news feed on its social-network platform. All three benchmarks were on track for weekly gains of at least 1%. Meanwhile, J.P. Morgan Chase & Co. reported a 37% drop in earnings, although this was largely related to one-time charges associated from the new tax law, which is expected to provide further gains over the longer term. Wells Fargo & Co. reported earnings and revenue that came in below consensus analyst forecasts in the fourth quarter.

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Shares of Snap Inc. slumped 2.4% in premarket trade Friday, after Raymond James turned bearish on the Snapchat parent, saying it was just an “overvalued chat company.” Analyst Aaron Kessler cut his rating to underperform, after starting coverage at market perform in April 2017. He said Snap is largely a chat/messaging app, “which historically don’t monetize as well as newsfeeds,” and said company has struggled to gain share for its Discover platform, which is viewed as better to monetize. Kessler said user growth is likely to remain challenging, and valuation appears expensive given structural challenges and competitive concerns. Competition includes Facebook Inc.’s Instagram. He said agency checks indicate Snap’s platform is still largely experimental and user demographics are less attractive to advertisers. “In our discussions with ad agencies, Snapchat’s very young audience is not as attractive to many advertisers given their much lower income levels,” Kessler wrote in a note to clients. Snap’s stock has tumbled 40.4% since it went public on March 2, 2017 through Thursday, while the S&P 500 has run up 16% over the same time.

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Treasury yields rose after the December consumer price index came in higher than expected. Core consumer prices showed a 0.3% gain. Economists surveyed by MarketWatch were forecasting a 0.2% increase in the core gauge, which excludes energy and food prices. Higher inflation could dampen demand for bonds and push the Federal Reserve to pursue more aggressive monetary tightening. The 10-year Treasury note yield rose to 2.570%, up from 2.531% late Thursday, according to Tradeweb. The 2-year note yield was up to 2.010%, compared with 1.972%, the first time the short-dated maturity has broken above 2% since 2008. The 30-year bond yield was up slightly at 2.877%, versus 2.863%.

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Wal-Mart Stores Inc. said it will take an approximately 14 cents-per-share discrete charge related to the Sam’s Club reorganization that will result in the closure of 63 locations. The “vast majority” of the charge will be in the fourth quarter. After announcing a minimum wage increase and other benefits on Thursday, it was revealed that Sam’s Club locations nationwide were closing. Twelve of the 63 shuttered stores will be converted to e-commerce fulfillment centers. There will be 597 clubs remaining. Sam’s Club Chief Executive John Furner said the company is working to place as many displaced associates as possible to other locations. About 10,000 jobs will be affected, according to The Wall Street Journal. Wal-Mart will share additional information “as appropriate” when it reports quarterly results on Feb. 20, Wal-Mart shares are up 0.3% in Friday premarket trading and up 47.2% for the last year. The Dow Jones Industrial Average is up 28.6% for the past 12 months.

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GameStop Corp.’s stock tumbled 3.8% in premarket trade Friday, after the gaming products retailer reported a big jump in holiday sales, but said it would take impairment charges of $350 million to $400 million related to its technology brands business. The company said the charges were primarily a result of the negative impact of a longer upgrade cycle for new mobile devices and the changes made by AT&T Inc. to the compensation structure. For the nine-week holiday period ending Dec. 30, GameStop said total rose 10.6% to $2.77 billion and comparable-store sales increased 11.8%, as U.S. same-store sales jumped 18.7%. Within gaming, new hardware sales increased 38.3%, boosted by sales of the Nintendo Switch and the launch of Microsoft Corp.’s Xbox One X, while video game accessories sales grew 33.7% and pre-owned sales declined 8.1%. Technology brands sales fell 18.6%, given the limited availability of Apple Inc.’s iPhone X and changes in AT&T’s compensation structure. The company said it expects 2017 earnings per share “near the middle” of the previously provided guidance range of $3.10 to $3.40 and same-store sales growth of between 4% and 6%. The has gained 2.4% over the past three months but has lost 19% the past 12 months. The S&P 500 has rallied 22% the past year.

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WASHINGTON (MarketWatch) — Sales at U.S. retailers rose 0.4% in December, a fourth straight monthly gain. The increase was a notch below the MarketWatch forecast of 0.5%, but sales for November and October were both revised higher. Excluding automobiles and gasoline, retail sales also rose 0.4% last month. The consumer price index, meanwhile, rose 0.1% in December, with four-fifths of the increase tied to the cost of housing. The increase matched the MarketWatch forecast.

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Wells Fargo & Co. shares slid 1.4% in premarket trade Friday, after the bank posted weaker-than-expected earnings for the fourth quarter. The bank said it had net income of $6.25 billion, or $1.16 a share, in the quarter, up from $5.27 billion, or 96 cents a share, in the year-earlier period. Revenue fell to $22.05 billion from $22.24 billion. The FactSet consensus was for EPS of $1.23 and revenue of $22.45 billion. Earnings were boosted by a net benefit from the tax bill signed into law in December, making Wells Fargo one of few banks not to take a charge. Wells Fargo has a net deferred tax liability instead of a deferred tax asset, which has caused other banks to write down part of their tax liability. The benefit came to $3.35 billion, or 67 cents a share, which was offset by $3.25 billion in pretax charges related to litigation costs. The bank also booked a pretax gain of $848 million related to the sale of Wells Fargo Insurance Services USA. Shares have gained 16% in the last 12 months, while the S&P 500 has gained 21%.

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Shares of J.P. Morgan Chase & Co. slipped 0.3% in premarket trade Friday, after the banking giant reported fourth-quarter results, which showed corporate and investment banking (CIB) revenue falling well below expectations. Although overall adjusted earnings per share, which excluded a large negative impact from tax legislation, and net revenue beat expectations, CIB revenue fell 12% to $7.48 billion, below the FactSet consensus of $7.91 billion, as net income fell 32% to $2.3 billion. Within the group, banking revenue rose 10% to $3.1 billion, boosted by 10% growth in investment banking revenue. But markets and investor services revenue tumbled 22% to $4.4 billion, weighed down by a 26% decline in markets revenue. Within markets, fixed income markets revenue plunged 34% and equity markets revenue was flat. The stock has rallied 15.5% over the past three months through Thursday, while the SPDR Financial Select Sector ETF has climbed 10.9% and the Dow Jones Industrial Average has run up 12.0%.

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Facebook shares are down nearly 4% in premarket trading Friday as investors react to news the social media giant is making major changes to its news feed that may come at the expense of ad dollars. Facebook said late Thursday it will now prioritize personal posts from family and friends over videos and posts from businesses and news media. In a blog post, CEO Mark Zuckerberg said the sweeping changes are being made to “encourage meaningful interactions between people,” even as he acknowledged it may hurt the company’s bottom line. Last quarter, the company took in $10.14 billion in ad revenue from 6 million customers, mostly small- and medium-sized businesses. Facebook has come under criticism over the content of its news feed in recent years, including its role in spreading disinformation around the presidential election.

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